The Fetishization of Employer-Provided Health Care

Earlier this month, at a town hall event for Senator Bernie Sanders’s presidential campaign, a military veteran named John told the senator that he was going to kill himself because the cost of treating his Huntington’s disease had saddled him with $139,000 in medical debt. Should John attempt suicide and survive, he will incur thousands of dollars more in debt. 

This is what it means for America to have no national single-payer system. John lost his eligibility for Tricare, the health care program for veterans. “They took it away,” he said. For however many lives are saved by the existence of America’s myriad safety net health care programs—like Medicaid, Medicare, CHIP, Tricare, the Indian Health Service—there are many others like John who slip through the cracks, become ineligible, fail to re-enroll, or get kicked off. According to one study from the University of Michigan, 30 percent of Michiganders on Medicaid faced a spell of uninsurance over the course of a year. 

Many leading Democrats are deathly afraid to take on this cruel, patchwork system in any meaningful way, because they have bought into the idea that it is political suicide to kill private, employer-sponsored insurance, which we are told many people actually like. We are told this even by candidates like Beto O’Rourke, who had previously supported Medicare for All. A survey conducted by America’s Health Insurance Plans (AHIP), the trade group for the bloodsuckers in America’s health insurance industry, found that 71 percent of people are “satisfied” with their employer-sponsored coverage. (“Satisfied” does not mean the same thing as “happy” or “would be motivated to vote solely on the basis of keeping that plan.”) Only 49 percent of Americans even have employer-sponsored insurance, meaning that, with the most generous definition of “happy,” about 34 percent of America is happy with their private insurance.

The reason that this minority and their imagined political priorities have such a stranglehold on the future of all Americans’ healthcare is that this group of people is wealthier, and therefore seen as much more important. Democrats who oppose Medicare for All are conducting class warfare against the poor, on behalf of those whose employers insulate them from the real cost of health care. 

According to the Kaiser Family Foundation’s (KFF) annual survey of employer health benefits, published Wednesday, the average annual premium for family coverage reached an insane $20,576 this year. As Bloomberg noted, that’s roughly the cost of a new car every year. Employers pay most of that cost—on average, $14,561 to the employee’s $6,015. (Just imagine the effect this has on wages, and try not to cry.) For individual coverage, the employer tends to pay a far larger share: On average, workers with individual plans pay 18 percent of health costs, compared to 30 percent for family plans. The average individual premium is just $1,242 per year.

The disproportionate costs paid by families matters a lot, because as the People’s Policy Project noted, “families with children wind up in dramatically worse financial circumstances than families without children, even when the families are otherwise identical.” In fact, “half of the poor adults who currently live in families with children would no longer be poor” if they didn’t have kids. In other words: Having kids is expensive as hell, and higher health insurance costs make that burden worse. How sensible and rational it is that the marketplace has determined that people with family coverage should shoulder more of their premiums than if they were single and childless.

The KFF data also shows how even within the pool of workers with employer-sponsored insurance, those who are paid less struggle more. Firms with many low-wage workers make their employees pay about $1,000 more, for a total of $7,047, than firms with few low-wage workers. Firms with low-wage workers also provide cheaper insurance overall to employees: It costs $17,633 per year, compared to the average of $20,576 overall. Those lower premiums usually means worse coverage and higher deductibles. The percentage of workers whose deductibles are more than $2,000 for individual coverage has risen to 28 percent, up from 12 percent in the year the Affordable Care Act was passed. For workers at small firms—the small businesses that American politicians rhetorically prize above all else—45 percent have a deductible above $2,000. And that’s just for individual coverage; families have to pay much more before insurance pays a penny. 

Navigating the American health care system—which really should not be called a system at all—is like completing an obstacle course which gets longer and harder the worse-off you are, as if for each $10,000 you earn, one 20lb weight is taken off your back. If you are poor, you have to sign up for Medicaid, make sure that coverage doesn’t lapse, and find a good doctor who accepts Medicaid, which pays doctors less than private insurance or Medicare despite the fact that poor people tend to be sicker and more expensive to treat. If your income gets too high, you have a new problem to solve. If your state drops your drugs from its formulary, well, that’s that. If you reside in one of a few states that treat the poor with a particular psychosis, more obstacles await: you might have to comply with work requirements, and the state might come after your family after your death for reimbursement of the medical expenses you greedily incurred whilst dying. And being sick makes you poorer, which makes you sicker. 

If you’re disabled, you should qualify for Medicaid and, potentially, Medicare—but you’d better document your disability correctly. Failing to do so might cause your state’s Medicaid program to decide it doesn’t want to cover your in-home care anymore, so you might die in a facility, away from your family. You may learn, much to your surprise, that your disabled child is not quite disabled enough to qualify despite not being able to dress herself or process emotions. You might have to divorce your spouse to get Medicaid to care for their Alzheimer’s, because the value of your combined assets could be too high to qualify. Please sell your house or divorce your dying spouse, because otherwise you won’t be poor enough to be kept alive. America famously does not value family or home ownership (only gun ownership); go somewhere else if you want those things. 

There are 156 million people in America with employer-provided insurance. Those people have a different obstacle course, but one that is still much harder to navigate if you earn less or are sicker. As the KFF data showed, a lot of these beneficiaries have garbage coverage, with high deductibles that make it unusable, saved only for true emergencies (and good luck telling which emergencies are worth going to the ER for, since you aren’t a doctor). If you do have one of those medical emergencies, you better cross your fingers that the doctor who treats you isn’t out-of-network, which you have no control over, landing you with a huge bill. You also better hope you don’t need an ambulance (let alone an air ambulance, the median price for which is $36,400), since those are the largest source of out-of-network charges: 51 percent of ambulance rides end up being out-of-network. And you better pray that your doctors don’t leave your insurance network, or the company decides not to cover your drugs or treatment. Some people have fairly nice employer-provided coverage, and aren’t very sick, so they don’t have to fight for coverage or find out what a surprise bill is. Congratulations to these lucky few. 

If you are really quite well-off and have private insurance subsidized by your employer, the quality of American health care is great. You can access fancy private rooms, new treatments, hospitals with expensive artwork on the walls and a 24-hour Au Bon Pain. It’s the problems that everyone else has that caused America’s life expectancy to decline for the third year in a row this year, for its health care outcomes to be worse than other countries with single-payer systems. It’s what we do to poor people that causes our maternal mortality rate to be worse than any other developed country; it’s worse in Georgia (the state) than it is in Uzbekistan. But given how well the system works for the better-off people, can we really ask for fewer mothers to die?

The health insurance industry, the Democratic presidential frontrunner, and many feeble liberal pundits who have more to fear from a sub-par oyster at Le Diplomate than the possibility of navigating Medicaid coverage, are insistent that many people like their private insurance, and those people must be coddled and protected at all costs. Where Bernie Sanders says he’s never met a person who likes their insurance, the status quo defenders insist that those with employer-sponsored insurance will die to defend it. Many Democrats buy into this. Nancy Pelosi buys into this. Do not poke the sleeping beast of Americans who love their private insurance, for they will surely punish you by voting for the guys who recently tried to blow up the entire health care system. 

It’s actually quite a challenge for supporters of preserving employer-sponsored insurance to argue this system is good. Its main virtue seems to be that its existence allows lawmakers to shove the larger problems to the side. Hence, the dependency on phrases like “people like it” (as an alternative to dying penniless) or are “satisfied.” To argue that employer-sponsored insurance is good invites the question: What is it about this means of insurance provision that’s so good? It’s hard to argue with a straight face that it makes sense to give employers the power to determine whether and how much health care their employees are allowed to have, or that it’s good for employees to be tied to jobs they hate, or for those workers to have no control over the possibility that their boss switches their coverage to something worse—potentially sending the beneficiaries on a mad scramble for a new primary care physician. The argument, instead, is that it would be disruptive to those employees, which is absurd given how tumultuous employer-sponsored insurance already is.

Many of these Democrats propose a middle ground: The public option, which they say would allow people the ever-vaunted choice to stay on their employer plan, while also providing a public option. As Pete Buttigieg’s half-baked plan demonstrated, these compromise proposals have not done a lot of work to show that there would be no more gaps where people lose coverage, that the public option would definitely be affordable—Washington state’s public option premiums will be just five percent lower than the private market—and that there will be no stratification of care, where people with private coverage get better care than people with public coverage. Medicare for America, Beto O’Rourke’s preferred plan, gets closer on the first two counts, but it would preserve out-of-pocket costs and premiums. 

Preserving a multi-payer system will also do less to lower health care spending, which is so high in part because of all of the different plans that must be billed (and who can be bilked for inflated costs). The only way to create a fair system in which better-off people can’t find a way to preserve their parallel, better system is one that covers everyone, and which healthier people can’t opt out of. 

The reason that Democrats are so eager to please those who have employer-sponsored insurance is that those in this cohort with decent plans tend to be wealthier, and wealthy people make up a big part of the Democrats’ path to power. Their 2018 midterm victories were powered by affluent suburbanites who might have dabbled with Republicanism before, but for whom Trump was a breaking point. To the Democratic Party leadership’s eyes, these well-off voters who have never really gotten screwed over by their insurance company are much more likely to respond to negative messaging about their private plan being taken away than by positive messaging about Medicare for All making the health care system more sane or equitable. 

If the Democratic Party were instead focused on bringing previously alienated people into the political system, the politics of healthcare in this country might be different. Less than half of families in the lowest income category voted in 2016, but 86 percent of the richest families voted. In 2016, the participation of black voters dropped to 59 percent, from 66 percent in 2012, an effect that was even more pronounced in the key states of Wisconsin and Michigan, where black turnout dropped by 12 points. In a poll taken earlier this year, 65 percent of black voters would support “A ‘Medicare for All’ health care system, where all Americans would get their health insurance from the government,” compared to 50 percent of white voters; 47 percent of black voters would “strongly support” that plan, compared to just 27 percent of white voters. The same poll saw 54 percent support among voters earning less than $50,000, compared with 43 percent among those earning more than $100,000. 

People whose health insurance is worse are poorer, and those people are less likely to vote. People whose health insurance is good are richer, and those people are more likely to vote. It’s a fairly simple electoral calculus. Even Chuck Schumer can figure it out.  

I have had reasonably high-quality health insurance for almost all my time in full-time work in the United States. I have never paid more than $180 a month for my employer-sponsored insurance; for that highest price, I got no-deductible access to a big network of high-quality doctors. (Though I was never able to find an in-network psychiatrist in our nation’s capital.) Despite suffering episodic migraine and the usual cocktail of millennial depression and anxiety, my health care costs are relatively low. I spend about $900 a year on drugs, but I don’t need many doctor’s visits, hospital stays, or in-home care. My private insurance pales in comparison to the National Health Service (NHS) in Britain, and I’d prefer to pay more taxes and have Medicare for All, but I am undeniably one of the privileged set in American health care. Why should my health insurance be any more generous or easier to use than that of the mom who quits her job to care for her father with dementia? Why should I pay less for insurance than someone who gets their health insurance on the ACA market, despite earning more than they do? Why should I be able to access higher-quality doctors than someone on Medicaid? 

The leading Democrats who oppose Medicare for All think I should have better healthcare than poor people. There is no other way around it; they think people with cushy, professional, or white-collar jobs that get them good health care for cheap are more important than people who are immiserated by the current system. While they offer occasional tepid support for a public option, they know this would create a two-tiered system in which people with private insurance access better care, and they don’t mind it. They want people with more money to have access to better care. 

There are enough people in this country who are being robbed, abused, and killed by our health care system that this lucky minority of privileged people needn’t kill the hope of adopting a more just and equitable system. If Democrats went after the votes of the poor and disenfranchised who are fighting for their lives, that anger and misery could easily be turned into votes—provided that they were being offered something beyond a means-tested band-aid. Instead of spending hundreds of millions of dollars on vanity projects and a doomed presidential run, Tom Steyer could spend all of that cash on getting voter IDs for minority voters in Republican states. Instead of running Joe Biden for president, a man whose own healthcare plan states it would keep 10 million people uninsured, you could run someone who supports Medicare for All and isn’t afraid to defend it—who finds the notion that there could be that many Americans left vulnerable and bereft to be indefensible.

Democrats cosplay as the party of the poor and disenfranchised, while brutally projecting their politics through a professional-class lens. Perhaps this is the way to every suburban Panera Mom’s heart, and vote—by allowing them to feel like they’re participating in a cause more just than the project provides. This strategy came up short in 2016. Since then, the electorate has only gotten younger, less white, less affluent, and much more angry. Things may change. It’s just a question of how many people have to die first.